The bad news is that Wisconsin is facing the prospect of having to bridge a $5.4 billion gap between expenditures and revenues in its next state budget.
The good news is that the gap may not actually be as large as advertised.
The Wisconsin Taxpayers Alliance (WISTAX) last week released a report that said the $5.4 billion figure is inflated. Todd Berry, president of the nonpartisan, nonprofit organization, was quoted by the Eau Claire Leader-Telegram last week as saying a more accurate number would be "in the neighborhood of $2 billion, figuring there will be some spending cuts and tax increases."
Why the discrepancy?
The $5.4 billion deficit quoted often by Gov. Jim Doyle includes an assumption that state officials will grant all of the $2.7 billion in new spending requests for 2009-11. That, given past history and the current economic crisis, isn't even remotely realistic. WISTAX notes that granting those spending requests and funding past state promises would result in expenditures increasing by 8 percent in 2009-10 and by 3.1 percent the following year. As WISTAX points out, the annual state general fund spending increases have averaged only 3.4 percent over the past decade.
The $5.4 billion deficit figure also assumes state government will take no action to close the deficit over the next two and a half years. "Of course, how realistic these forecasts are hinges on what can be projected 31 months hence about the economy, federal actions, state tax collections, and expenditures," WISTAX said in its report, noting current projections show tax collections for this year and the next two years totaling $1.33 billion below 2008 collections.
So why the discrepancy?
Obviously, presenting the gloomiest financial picture possible gives Gov. Doyle and any other governor greater leverage as they make their pitch for money from a federal economic stimulus package to go to state and local governments.
It also makes for a little gamesmanship in Madison. With Democrats in control of the Legislature and the governor's mansion, there is a greater political opportunity - and risk - for the party in the outcome of the next budget negotiations. Making the deficit look larger than it actually is - by adding in spending proposals that have no chance of passage - will make it easier for Democrats to claim victory in bridging the gap. Not that the task of balancing the budget will be easy, by any stretch of the imagination. But the truth is it may not be as difficult as Gov. Doyle would like you to believe right now.
The good news is that the gap may not actually be as large as advertised.
The Wisconsin Taxpayers Alliance (WISTAX) last week released a report that said the $5.4 billion figure is inflated. Todd Berry, president of the nonpartisan, nonprofit organization, was quoted by the Eau Claire Leader-Telegram last week as saying a more accurate number would be "in the neighborhood of $2 billion, figuring there will be some spending cuts and tax increases."
Why the discrepancy?
The $5.4 billion deficit quoted often by Gov. Jim Doyle includes an assumption that state officials will grant all of the $2.7 billion in new spending requests for 2009-11. That, given past history and the current economic crisis, isn't even remotely realistic. WISTAX notes that granting those spending requests and funding past state promises would result in expenditures increasing by 8 percent in 2009-10 and by 3.1 percent the following year. As WISTAX points out, the annual state general fund spending increases have averaged only 3.4 percent over the past decade.
The $5.4 billion deficit figure also assumes state government will take no action to close the deficit over the next two and a half years. "Of course, how realistic these forecasts are hinges on what can be projected 31 months hence about the economy, federal actions, state tax collections, and expenditures," WISTAX said in its report, noting current projections show tax collections for this year and the next two years totaling $1.33 billion below 2008 collections.
So why the discrepancy?
Obviously, presenting the gloomiest financial picture possible gives Gov. Doyle and any other governor greater leverage as they make their pitch for money from a federal economic stimulus package to go to state and local governments.
It also makes for a little gamesmanship in Madison. With Democrats in control of the Legislature and the governor's mansion, there is a greater political opportunity - and risk - for the party in the outcome of the next budget negotiations. Making the deficit look larger than it actually is - by adding in spending proposals that have no chance of passage - will make it easier for Democrats to claim victory in bridging the gap. Not that the task of balancing the budget will be easy, by any stretch of the imagination. But the truth is it may not be as difficult as Gov. Doyle would like you to believe right now.
